Residents Scheme Regulations
- An individual may take up residence in Malta under the Residents Scheme Regulation 2004, by obtaining a certificate from the Inland Revenue Department.
- The certificate is issued for an indefinite period as long as certain conditions are satisfied on an annual basis.
- Holders of such a certificate and their dependants may therefore enter and leave Malta as and when required without any other formalities.
Who may apply
Any foreigner, of whatever nationality, may submit an application under the scheme provided that the specific conditions are satisfied.
This scheme is of particular interest to those Foreign Nationals with a relatively high income, who are subject to a high tax rate in their country of residence
Conditions for Application
An individual is eligible for the Residents Scheme Regulation 2004 if:
- He/she has an annual income of at least Lm 10,000 (¤ 23,300 €) or capital of at least Lm 150,000 (¤ 350,000 €)
- He/she remits annually to Malta an income equivalent to Lm 6,000 (¤ 13,980 €) in his / her respect and Lm 1,000 (¤ 2,330 €) in respect of each dependant.
- The processing of applications takes around three months.
- The minimum amount of tax Lm 1,800 (¤ 4,193 €) must be paid within 30 days from approval of the application
- This amount is credited against the tax due by the permanent resident for the first year of assessment. If the applicant does not take up residence within 12 months from the certificate’s date of issue, and such certificate is withdrawn, a refund of Lm 1,300 (¤ 3,030 €) is given.
Once in possession of a Permanent Residence Scheme certificate the holder:
- Will be required to take up residence by not later than one year from the issue date of the certificate.
- Must purchase a house valued at not less than Lm 50,000 (¤ 116,500 €) or an apartment / maisonette of at least Lm 30,000 (¤ 69,881 €)
Alternatively he / she may lease or rent property for not less than Lm 1,800 (¤ 4,193 €) per annum. The acquisition or lease should take place within one year from the issue date of the certificate.
- If you spend less than six months in one calendar year in Malta, there is No Tax.
- Foreigners residing in Malta are taxed on income and capital gains arising in Malta (unless exempt) and on income remitted to Malta.
- Foreign source income which is not remitted to Malta is not subject to Malta tax and
- Capital gains are not taxable even if they are remitted to Malta.
- Foreign Nationals (not Permanent Residents) are able to purchase one property in Malta in their own name as long as the value is not less than Lm 66,200 (¤ 154,200 €) in the case of a house and not less than Lm 39,700 (¤ 92,480 €) in the case of an apartment / maisonettes.
- In Special Designated Areas, Foreign nationals may purchase more than one property in the name of an individual/s, a Company or Trust and they may let it out.
Citizens from all EU member states, who have resided in Malta, at any time preceding the date of acquisition, for a minimum continuous period of five years, may freely acquire more than one immovable property, without the necessity of obtaining an AIP permit.
The income tax rates applicable to foreign residents are the standard rates of income tax applicable to residents which are as follows:
|Lm 4,500 (¤ 10,500 €)
Lm 3,500 (¤ 8,150 €)
Lm 2,000 (¤ 4,650 €)
|Lm 3,250 (¤ 7,570 €)
Lm 2,250 (¤ 5,250 €)
Lm 1,250 (¤ 2,900 €)
Couples with separate incomes may choose to be taxed on an individual basis in which case the first Lm 3,250 (¤ 7,570 €) would be TAX FREE.
Should you require any further information please contact us and we will forward you the details of our Legal & Tax advisors